USD/JPY drops below 111.00 amid reports of new tariffs

• USD/JPY breaks lower on a report suggesting Trump wants to impose tariffs to cars.
• President Trump meets with the Head of the European Commission to speak about trade.

The USD/JPY pair was hovering above 111.00, even after weak housing data from the US, but then tumbled quickly to 110.80, moving close to the weekly lows after reports of new tariffs from the Trump administration.

The Washington Post reported that several Trump’s economic advisers believe he plans to impose a 25% tariff on $200 billion in foreign-made cars later this year. The report pushed US yields lower and equity prices to the downside.

USD/JPY hit a fresh low at 110.80 and as of writing was hovering around 110.95, slightly above daily lows but holding a clear bearish tone.

Earlier today, the pair remained relatively steady after US New Home Sales missed forecasts in June, with a 5.3% monthly slide. The report included negative revisions to May’s data but did not affect the greenback. Attention regarding economic indicators is on Friday’s US Q2 GDP report. Comments from US officials signals that data will come near 5%.

Levels to watch

The decline found support at a downtrend line at 110.80. A break lower could open the doors to an extension to the downside. Support levels might be seen at 110.25 (Jul 4 low) and 109.90. To the upside, short-term resistance could be located at 111.15, 111.35/40 (daily high) and 111.70.